Indonesia's Palm Oil Output To Recover Next Year, Says Producers Association

From Mohd Khairi Idham Amran BALI (Indonesia), Nov 24 (Bernama) -- Indonesia's palm oil output is expected to recover next year due to better weather conditions, the Indonesian Palm Oil Producers Association (Gapki) said. "Next year, we are optimistic that the production will recover but only God knows what the percentage of the recovery will be," said Chairman Joko Supriyono. Nevertheless, he said, higher production not accompanied by improved demand would not be a good fundamental for crude palm oil (CPO) prices. "It is very important for Indonesia, especially on a government-to-government platform, to encourage more demand for palm oil from our traditional customers,” he told reporters after the welcoming remarks at the Indonesian Palm Oil Conference and 2017 Price Outlook (IPOC 2017) held here Thursday. Indonesia's palm oil output is expected to drop between 15 and 20 per cent to 30 million tonnes this year from last year, the first time in 20 years, derailed by the dry and hot El Nino weather which affected fresh fruit bunch production. Exports are also predicted to decline around 15 per cent from last year to 22.5 million tonnes. Meanwhile, Bayu Krisnamurthi, Chief Executive of the Indonesia Estate Crop Fund (IECF) for Palm Oil, said IECF plans to increase its allocation for a replanting scheme as there is a huge need for replanting across the country. "The fund is flexible between funding biodiesel implementation and the replanting scheme. When we feel the CPO price is supportive, we can allocate more for replanting," he said. He added that an estimated 1.6 million hectares of palm oil areas across the country need immediate replanting. IECF is a fund established by the government to collect money from industry players and use it for biodiesel implementation and replanting. Meanwhile, IPOC 2016 Chairman Mona Surya said palm oil continues to be an important sector in Indonesia's economy as six million households depend on oil palm planting. "That means there are more than 24 million people who are making a living from this sector," she said. She said the growing industry was also raking in the most foreign earnings via exports. "Last year, the export contribution was US$18.5 billion, the biggest contributor to the national export foreign exchange reserves," she added. Organised by Gapki, the 12th edition of IPOC, themed "Palm Oil Development: Harmonising Market, Society and the State", is a platform for senior business executives and policymakers in Indonesia to formulate new strategies to solve difficulties oil palm planters face. The three-day conference, which began Wednesday, attracted about 1,300 delegates from more than 30 countries. -- BERNAMA